How can you manage the risks of philanthropic giving?

There are significant risks, from money laundering, sanctions breaches and bribery to reputational risks. And each country has its own laws. You can create a whole suite of policies and for large NGOs you probably should. However, it’s culture and awareness that really matter. If it doesn’t feel right or it sounds to good to be true it usually is. Everyone in your charity needs to understand that and to alert management if it ever happens to them.

Trust your gut. If you don't want it on the front page of the paper or trending on social, you know what to do. That said, I have found that a comprehensive Gift Acceptance Policy, researched and prepared by expert staff - with input from associated legal and financial professionals, vetted by the executive team and then approved by the Board, is undeniably the best practice to mitigate risk. So is revisiting it for amendments every three to five years. Having meaningful organizational advancement policies like this indicates the Board and its CEO are carrying out their fiduciary responsibilities.

It is about a thorough due diligence. Whilst the ESG report can be the starting place to check the potential donors, it is important to check if any key members of the donors have been involved in any controversial incidents from professional misconduct to inappropriate relationships.

The strategic and operational risk is highest when donors are approached and disburse a lower intended corpus to the 501c3 organization. The loss of the larger goal becomes more or less moot ( for the long term goal of high net worth donors are in a gray zone of these meaningful expectations ). The reason for raising 70% of a large silent goal before announcing the high amount is that it assures at least 70% of the Campaign, assuring what would be termed a success). The major Universities all seek to announce a high capture on Campaigns to assure all of these end-goals are largely met, making them fool proof, and never failing to reach the end goal due to the announcement of the successful figure. It’s a strategic front load success.

One of the key points is to have the expectation alignments. This means panting a realistic picture with the grantees. Both the donors and grantees need to set the right expectations from what must be done to what is ideally done.

Many nonprofits are successful with fundraising on the following social media platforms such as Meta-Facebook and Instagram. With post boosting, Giving Tuesday and year end campaigns can raise up to $60k. What does a nonprofit do when their main social media account is hacked? Despite hundreds of complaint reports, not one Meta employee reaches out resulting on thousands of dollars lost. My advice, stick to fundraising platforms other than social media to attract philanthropists.